The insurance regulator is set to scrutinise the bank accounts of all non-life insurers as part of its efforts to protect the interests of the policyholders and establish good governance in the companies, officials said.
The Insurance Development and Regulatory Authority (IDRA) had earlier set the number of bank accounts that a non-life insurer could use for receiving its premium income.
The regulator, in a circular issued on July 2, 2019, said the insurance companies could open a maximum of three bank accounts for receiving premium money.
The companies had to close down the bank accounts in excess of the limit set by the IDRA within July 2019.
Each of the non-life insurers, however, is allowed to have one bank account for preserving capital, one for depositing their other incomes, one for payment of insurance claims, and one for management-related expenditures.
The insurance companies are not allowed to pay claims, commission, salary and wages in the form of cash under any circumstances.
The branches of insurance companies can open only one bank account for maintaining their expenditures.
The non-life insurance companies were asked to follow the order and inform the IDRA about the measures taken.
After one and a half year of issuance of the circular, the IDRA has now moved to check how many bank accounts the non-lifers actually have and whether those are maintained in line with the regulator's directive.
Recently, the IDRA has written to the Bank and Financial Institutions Division (BFID), seeking help to get bank details of 46 non-life insurance companies from the scheduled banks with required instructions from the Bangladesh Bank (BB).
The central bank initially had said the banks cannot provide account details to anyone without an order from court under Section 5 of the "Banker's Book Evidence Act 1891".
However, the BB officials later agreed that the bank details of the non-life insurance companies can be given to the IDRA since it is a regulatory body.
A senior official at the BFID, referring to the IDRA letter, told the FE that once the non-life insurers used to provide a commission to insurance agents at rates more than 15 per cent as per insurance rules.
They also indulged in unethical competition to grab business, which prompted the regulator to contain the number of bank accounts and check their financial affairs, he added.
IDRA Chairman Dr M Mosharraf Hossain could not be reached for his comments on the issue.
